On 30 May 2019, the Fair Work Commission announced increases to minimum wages effective from the start of the first full pay period on, or after, 1 July 2019.
The Commission rejected the ACTU’s push for a ‘living wage’.
National minimum wage increase
The new national minimum wage will be $740.80 per week, or $19.49 per hour, resulting in an increase of $21.60 per week or 57 cents an hour.
This represents an increase of 3 percent, as compared to the 3.5 percent minimum wage increase awarded last year.
Even award-free employees must receive at least the national minimum wage.
Award minimums increased
Minimum wages in awards will also increase by 3 percent. Weekly wages will be rounded to the nearest 10 cents.
For example, at the C10 tradesperson’s modern award minimum wage rate, this equates to an increase of $25.10 per week.
What does this mean for employers?
Employers will need to review their pay rates to check that employees are being paid at least the minimum wage at all times.
Employers also need to ensure that award covered employees are paid at least the increased minimum award rates from the first full pay period starting on, or after, 1 July 2019.
Employers should ensure that their payroll is set up to make payments of the increased wages from the first full pay period on or after 1 July 2019.
Penalties apply to employers who fail to meet minimum wage obligations.
What about employers with enterprise agreements, or with employees being paid ‘all-in’ salaries?
Even where the employer is a party to an enterprise agreement, it must ensure that the base rates of pay provided under that agreement are at least equivalent to the new minimum rates of pay.
Employers who have set-off clauses in their employment contracts where they pay employees ‘all-inclusive’ salaries will also need to make sure that they are paying enough to cover their employees’ minimum entitlements each pay period, including the increased national minimum wage (or their respective modern award wage).
This also includes any entitlements that the employee may have under any applicable award, taking into account the working patterns of employees.
Employers who utilise annualised salary arrangements permitted by some awards should compare the annualised salary against the updated award to ensure that employees are receiving sufficient remuneration.
More information
For more information on the minimum wage increases, please contact a member of our Employment and Workplace Relations team on (03) 8600 8888.
Note: This update is a guide only and is not intended to constitute legal advice.